Head-To-Head Survey: Berry (NASDAQ:BRY) vs. SandRidge Energy (NYSE:SD)

SandRidge Energy (NYSE:SD) and Berry (NASDAQ:BRY) are both small-cap energy companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Analyst Ratings

This is a summary of recent ratings for SandRidge Energy and Berry, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SandRidge Energy	0	1	0	0	2.00
Berry	1	3	0	0	1.75

Berry has a consensus target price of $4.00, indicating a potential upside of 22.70%. Given Berry’s higher probable upside, analysts plainly believe Berry is more favorable than SandRidge Energy.

Dividends

SandRidge Energy pays an annual dividend of $0.48 per share and has a dividend yield of 3.3%. Berry pays an annual dividend of $0.12 per share and has a dividend yield of 3.7%. SandRidge Energy pays out 27.0% of its earnings in the form of a dividend. Berry pays out -10.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. SandRidge Energy has raised its dividend for 2 consecutive years. Berry is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

61.8% of SandRidge Energy shares are held by institutional investors. Comparatively, 94.9% of Berry shares are held by institutional investors. 1.5% of SandRidge Energy shares are held by company insiders. Comparatively, 2.0% of Berry shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

SandRidge Energy has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Berry has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Profitability

This table compares SandRidge Energy and Berry’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SandRidge Energy	42.42%	11.58%	9.19%
Berry	-12.42%	2.95%	1.37%

Earnings and Valuation

This table compares SandRidge Energy and Berry”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SandRidge Energy	$125.29 million	4.30	$62.99 million	$1.78	8.23
Berry	$671.45 million	0.38	$19.25 million	($1.18)	-2.76

SandRidge Energy has higher earnings, but lower revenue than Berry. Berry is trading at a lower price-to-earnings ratio than SandRidge Energy, indicating that it is currently the more affordable of the two stocks.

Summary

SandRidge Energy beats Berry on 9 of the 16 factors compared between the two stocks.

About SandRidge Energy

SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.

About Berry

Berry Petroleum Company, LLC., formerly Berry Petroleum Company, is an independent energy company. The Company is engaged in the production, development, exploitation, and acquisition of oil and natural gas. The Company’s principal reserves and producing properties are located in California (South Midway-Sunset (SMWSS)-Steam Floods, North Midway-Sunset (NMWSS)-Diatomite, NMWSS-New Steam Floods, Texas (Permian and E. Texas), Utah (Uinta) and Colorado (Piceance). The Company’s operations are conducted in the continental United States. In December 2013, Linn Energy LLC and Linn Co, LLC (Linn Co) announced the completion of the merger between LinnCo and Berry Petroleum Company (Berry), where LinnCo had acquired all of Berry’s interest.